The Bloody HD Camera Wars Are ComingBy John Honovich, Published on Aug 25, 2014
The most important emerging trend in video surveillance today is the emergence of non-IP HD cameras.
But the conflicting go-to-market strategies and the weaknesses of each participant are likely to make this a bloody fight that risks undermining its potential.
In this note, we analyze the competitive positioning of the main players (such as Dahua CVI, Hikvision TVI, AHD, SDI and traditional IP players like Axis) and how this is likely to play out.
Driver - Cost
Especially for the lower half of the rich markets and most poorer markets, the cost of IP cameras is a major barrier.
Super Low Cost Non IP HD
For years, non IP HD (in the form of HD SDI / HDcctv) was quite expensive, often more expensive than IP cameras, making it impossible for it gain meaningful share.
This changed when Dahua released HD-CVI offering HD cameras at sub $50 price points and recorders at sub $200 ones. This is half the price of even super low cost IP cameras / recorders.
Dahua is not alone. In addition to their OEMs / partners, 2 other important rivals are emerging - TVI, most notably supported by Hikvision and AHD from a Korean chip manufacturer.
For those wanting more on the tech details, see:
This post presumes basic knowledge of the technology, focuing on the business aspects.
All 4 main options (AHD, HDCVI, HDSDI and HDTVI) are fundamentally incompatible.
The incompatibilities are deep as they are on the hardware / electrical level. So, unlike IP cameras, there is no hope of software of firmware upgrades to support different types.
There is a possibility of building hardware that recognizes and automatically encodes each type but that gets very expensive and is unlikely to be a 'universal' solution.
Manufacturer Marketing Weaknesses
All of the manufacturers involved have critical weaknesses:
- AHD has no major manufacturer support and appears to be the product of choice for Chinese spammers (for now).
- CVI has Dahua but Dahua, as a historic OEM, is terrible at marketing. They are trying to trick the market into thinking they have a standard but the body they bought out (the HDcctv Alliance) has little name recognition nor respect in the industry.
- SDI is really expensive, offers the least functions and has no major manufacturer champion.
- TVI has Hikvision and is not controlled by them. This has potential though Hikvision is just getting started.
These products are going to be most heavily promoted by the bottom of the industry -- small online retailers, fake manufacturers that relabel Chinese products, hustlers trying to make a quick buck, Chinese spammers, etc. This is going to make things even more confusing as the amount of misinformation is going to be significant.
The response to these super low cost non IP HD offerings have been one of the best we have ever seen.
The appeal of super inexpensive systems that work with existing coax and do not require network configuration of cameras is high.
Even with the major marketing weaknesses, these offerings are addressing a point of great need.
Risks - Incompatibility and Longevity
For the low end of the market, price will rule.
But for larger buyers, the risk of getting stuck with a technology that can not integrate or might not be supported a few years from now, is a key risk and barrier, one that IP manufacturers will clearly harp on.
IP Camera Manufacturers Positioning
From speaking with major manufacturers, most are not even closely tracking non IP HD.
Equally important, the idea of dropping prices further is anathema to them. They will concede modest cuts but they have no motivation to see prices drop 50% or more.
In particular, Axis, who has the industry strongest marketing machine, is almost guaranteed to ignore non IP HD and provide it no recognition at all. As we have seen Axis over the years, their approach appears to be to starve competing technologies of attention and validation, which is something that the non IP HD suppliers definitely need.
The incompatibility issue and the weak marketing position of the primary players is going to combine for a bloody, messy fight.
Ironically, they all stand to lose as a unified approach amongst them would be far more effective in combating their real threat - the powerful Western manufacturers who dominate industry marketing.
Despite this, we expect adoption of non IP HD to be one of the biggest trends in the industry for the next few years though held back by these problems.